Remortgaging keeps market buoyant

Financial adviser, Bestinvest, has described the mortgage market as “pretty buoyant” despite a recent statement by the Council of Mortgage Lenders blaming a combination of higher interest rates and tighter lending criteria for a “sharp fall” in mortgage approvals and a reduction in the number of mortgage products available.

Peter O’Donovan, mortgage manager at the firm, claims that remortgaging is keeping the industry afloat.

At the same time, he warns that arranging a remortgage has become more difficult in recent months, with the average fee increasing to around £1,000.

Meanwhile, analysts expect the Bank of England’s Monetary Policy Committee (MPC) to cut interest rates in February.

This week’s dramatic action by the Federal Reserve in cutting rates to 3.5%, to stave of an economic recession in the US, has heightened speculation that central banks worldwide will be looking to reduce base rates.

However, the Bank of England’s governor, Mervyn King, has made it clear that he will not be following the Fed’s radical lead because of concerns over inflation, which is likely to exceed the Government’s target of 2% this year.

Most analysts are not looking beyond a cut of one-quarter-of-one per cent next month.

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